UPDATE 1-New Jersey Senate, Assembly passes nuclear subsidy bill

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April 12 (Reuters) - The New Jersey Senate and Assembly on Thursday passed a bill that would cost about $300 million a year to subsidize three nuclear reactors operated by New Jersey power company Public Service Enterprise Group Inc.

“This legislation is a sensible solution that protects the viability of nuclear energy and its benefits for New Jersey, while at the same time ensuring consumers are protected, as well,” PSEG spokesman Michael Jennings said in a statement.

PSEG had said it could shut the reactors, two at Salem and one at Hope Creek, in a couple of years if they do not receive some sort of federal or state assistance.

“Today New Jersey legislators turned their backs on consumers by approving a bailout for PSEG’s already profitable nuclear plants,” James Benton, New Jersey Petroleum Council Executive Director said.

“Forcing consumers to boost PSEG’s Wall Street profits at the expense of Main Street consumers is irresponsible and sets a dangerous precedent moving forward for corporate welfare in the state,” Benton said.

PSEG has, however, said the reactors are making money but said the units are not expected to keep making as much of a return in the future as the company is seeking.

U.S. power company FirstEnergy Corp had urged the federal government last month to evoke little-used emergency powers to help it keep several struggling nuclear and coal-fired power plants open, a move critics blasted as an attempt at a corporate bailout.

Also, Exelon Corp said in February that it will shut the Oyster Creek nuclear power plant in New Jersey in October 2018, about a year earlier than planned.

“While today’s outcome is a setback, it is not the end of this issue - and we will continue to reiterate the facts about PSEG’s nuclear plants,” said Matt Fossen, spokesperson for the New Jersey Coalition for Fair Energy.

“We urge Governor Murphy to recall those facts, and do what’s best for New Jersey ratepayers by vetoing this unnecessary energy tax.”

The U.S. nuclear industry has been suffering for several years as cheap and abundant natural gas from shale formations has depressed power prices, making it uneconomic for many reactors to continue operating.

Over the past five years, U.S. nuclear operators have shut six reactors and plan to shut another six reactors over the next five years.

The 99 nuclear reactors operating in the United States provide about 20 percent of the nation’s power. (Reporting by Nallur Sethuraman in Bengaluru; Editing by Richard Chang)